Microsoft and Cisco strengthen alliance

Microsoft, Cisco: best of friends, worst of enemies, suggests research and analyst firm Ovum.

Microsoft and Cisco's talk of greater interoperability belies the real rivalry between the two IT giants, says a research and analyst firm.

While the two companies may say they are keen to work more closely together, the reality is they are still fierce competitors, particularly in the Unified Communications space, Ovum says.

"We, along with others, have suggested that a war between Microsoft and Cisco is breaking out, especially in the Unified Communications market. Cisco's purchase of WebEx was the latest major salvo in this war, but the two companies are increasingly shaping up as the two major competitive forces in this market. Both companies' legendarily aggressive sales forces have been feeding this notion as they seek to sell their UC solutions in the market," Ovum, part of the Datamonitor Group, says in a research note.

"But customers on the whole want to mix IP telephony infrastructure from Cisco (or its competitors) and messaging software from Microsoft (or its competitors) and don't want to be forced into an all-or-nothing approach from either vendor," it adds.

Ovum's comments come after the software and networking giants held a webcast earlier this week to emphasize the importance of their alliance.

During the webcast, which was attended by Microsoft CEO Steve Ballmer and Cisco chairman and CEO John Chambers, the two companies announced seven key areas of collaboration: IT architecture, security, management, wireless and mobile, unified communications, connected entertainment, and small and medium-sized business (SMB).

"Customer won't buy from either one of us unless we interoperate," Cisco's executive vice president and chief development officer Charlie Giancarlo, also present at the meeting, said.

"Microsoft's announcements were useful as a statement of intent from both companies about their plans to interoperate but don't go much further than that," Ovum continued.

"The behaviour of Cisco's and Microsoft's salespeople on the front lines and their engineers in the backrooms at both companies will be what really drives market perception of their ability to work together," it said.

"The tension between seeking competitive advantage through proprietary technology and establishing interoperability through open standards will remain, and both companies will have to make tough decisions about where to draw the line between the two. Hopefully they will both move a little further in the direction of interoperability, but they will both also continue to do their best to create a world where the other isn't needed," it added.